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APPLIED SUBJECT
ENTREPRENEURSHIP

Department of Education • Republic of the Philippines

 This module is designed and written with you in mind. It is based on the Most Essential Learning
Competencies (MELCs). It is here to help you master this applied subject on Entrepreneurship.

It contains information about new product development. It includes activities that will help you
develop a new product, create product prototype, test product prototype, and validate product
descriptions to market.

This should be accomplished within a week. All activities that require online submission should

be coordinated with your teacher. Save the date for your online class and be updated with teachers’

announcements in the google classroom or FB messenger.

Content Standard: The learner demonstrates understanding of environment and market in one’s

locality/town.

Performance Standard: The learner independently creates a business vicinity map reflective of potential
markets in one’s locality/town.

Objectives

1. Identify the stages of product development.

2. Create and test the product prototype; and
3. Follow steps in developing a business model for the proposed business.

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QUARTER 2 – WEEK 2
Matching Type. Match the word in Column A with its corresponding description in Column B. Write the
letter of your answer on the space provided.

COLUMN A COLUMN B

______1. Idea A. find ways to best meet the needs of potential market

______2. Business Model B. creation of product prototype and description

______3. Product Prototype C. the launching of product into the market

______4. Product Description D. focused on the usage of the product

______5. Research E. a design for a successful operation of the business

______6. Analysis F. a mock-up, model of simple simulation of a product

______7. Testing G. concept

______8. Functional Prototype H. contains features and benefits of a product

______9. Product Introduction I. decisions to be made based on product testing

______10. Product development J. the use of small group of actual consumers

If you will recall the Lesson on Top and Successful entrepreneurs, you will notice that their humble
beginning starts with finding a product or service to develop with. Every aspiring entrepreneur must know
how to create, innovate, and modify products to make it a new product that will satisfy the changing
needs and wants of the market.

This lesson will help you face the challenges of looking into the different phases of new product
development.

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QUARTER 2 – WEEK 2
 Lesson New Product Development
1 By: Bernadine R. Oray

What is new product development?

● It is a complete process of bringing a new product or service to the market. It may be a

consumable or business product.
● It may be done to develop an item to compete with a product or may be done to improve an
already established product.
● Developing a new product involves several stages which typically center around the following
key areas:

1. The Idea: Every product must start with an idea. The idea may start with something that already
exists or something that is revolutionary and unique. Many of the leading manufacturers will have
whole departments that focus solely on the task of coming up with a unique and totally “out of
the box idea”.
2. Research: After brainstorming with the plenty of ideas for a new product, the next step is to make
market research. This will help seeing the demand for the product, the specific features need to
be developed that will best meet the needs of the potential market.

3. Development: In this stage, creating prototypes of the product may be designed and modified.
Coming up with a finished product that consumers will want to buy is the goal in this stage. A
product description is also developed in this phase.

Creating a product prototype

● The main reason for prototyping is to validate the idea and this is the step in converting
an idea to a real product.
● A prototype could be a working model, representational (non-working) model, miniature
or a scale model, video or a photo demonstration based on the factors like a problem to
be solved, the mandate of the end customer, investor/industry requirements or
prototype that best satisfies the purpose.
● These prototypes can fall into one of the following areas: functional, display or a small model. The
functional prototype focuses on the functions and not on the looks. The display prototype focuses
on the looks and not so much on the function.

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 How to Develop a Product Description?

A product description is the marketing message that details what a product is and why it
is worth purchasing. The purpose of a product description is to supply customers with important
information about the features and benefits of the product, so they are compelled to buy.
Convincing your customers to buy your product is one of the challenges in production and
operations. Writing an effective product description will help you sell without talking too much.

a. Know your target audience

b. Focus on the Product benefits
c. Use emotional hooks
d. Use Natural Language and tone
e. Use power words that sell
f. Make it Easy to Scan
g. Optimize for Search engines
h. Use good images

4. Testing: In this stage, most companies test their new product with a small group of actual
consumers. This helps them ensure the viability and profitability of the product. It allows them
to make necessary improvements before launching the new product.

Testing the Product Prototype

● Testing a prototype / developed design is a very important part of the design and
manufacturing process. Testing and evaluation simply confirm that the product will work
as it is supposed to, or if it needs refinement.
● In general, testing a prototype allows the designer and client to assess the viability of a
design. Will it be successful as a commercial product? Testing also helps identify potential
faults, which in turn allows the designer to make improvements.

Reasons for testing and evaluating product prototype

1. It allows customers to give views, opinions and suggest improvements.

2. Safety issues, relevant regulations and legislations are identified, thoroughly tested, and
evaluated.
3. It allows production costs to be assessed and finalized.

5. Analysis: Looking at the feedback from consumer testing enables the manufacturer to make any
necessary changes to the product and decide how they are going to launch it to the market. With
information from real consumers, they will be able to make several strategic decisions that will
be crucial to the product’s success, including what price to sell at and how the product will be
marketed.

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 6. Introduction: Finally, when a product has made it all the way through the new product
development stage, the only thing left to do is introduce it to the market. Once this is done, good
product life cycle management will ensure the manufacturer makes the most of all their effort
and investment.

Creating a Business Model

Business model refers to the mode by which the product concept seeks to make money
so that it can have a sustainable operation. You can think of a business as a machine that generates
revenues. For it to continue going, it should be generating enough revenue to cover both its costs of
operations, as well as providing a decent return on investment. If the business cannot accomplish this,
then it will not survive.

According to the blog of Joel Mohr, the concept of a business model canvas is extremely useful
for companies big and small, tall, and wide. Along the pathway to entrepreneurship and entrepreneurial
success, filling out your own business model canvas can be a crucial activity to help you understand your
own business model in a simplistic, yet easily identifiable manner.

A business model canvas is a chart-like template that is separated into 9 pillars. These are the
foundation of a company’s business model. It is a strategic management tool that summarizes and
describes these pillars. (The Ingenious Entrepreneur blog by Mohr)

This illustration is taken from the Ingenious Entrepreneur blog by Joel Mohr.

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Activity 2.1. Think of a product/service you want to introduce in the market by accomplishing the New
Product/Service template below.

This activity was adapted from the Entrepreneurship book of Angelo A. De Guzman pp. 22.

Activity 2.2. Create a product prototype or a service process design and paste it in the worksheet below.
List down all the raw materials, packaging materials and labor cost on its corresponding boxes. Write
down also the steps on how you will test your product and what are your expected feedbacks from the
customers.

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Activity 2.3. Watch the details on how to create a business model in the given youtube link. The
Business Model Canvas - 9 Steps to Creating a Successful Business Model - Startup Tips . Write a
business model for your proposed business following the template given on page 79. Encode your
output in a word document file for submission in the google classroom.

● The reason to new product development is to compete with a product or may be done to
improve an already established product.
● Product development follows several stages such as generating ideas, research, product
development, testing, analysis, and product introduction.
● Product development includes product prototype and product description.
● Creation of product prototype maybe be functional, display or small model.
● A business model describes the rationale of how an organization creates, delivers, and captures
value, in economic, social, cultural, or other contexts.

Answer the following questions in a complete statement.

1. Why is there a need for new product development?
________________________________________________________________________
2. How do you create and test a product prototype?
________________________________________________________________________
3. Give three importance of developing a business model.
________________________________________________________________________

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Matching Type. Match the word/s in Column A with its corresponding description in Column B. Write
the letter of your answer on the space provided.

COLUMN A COLUMN B

______1. Idea A. find ways to best meet the needs of potential market

______2. Business Model B. creation of product prototype and description

______3. Product Prototype C. the launching of product into the market

______4. Product Description D. focused on the usage of the product

______5. Research E. a design for a successful operation of the business

______6. Analysis F. a mock-up, model of simple simulation of a product

______7. Testing G. concept

______8. Functional Prototype H. contains features and benefits of a product

______9. Product Introduction I. decisions to be made based on product testing

______10. Product development J. the use of small group of actual consumers

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QUARTER 2 – WEEK 2